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Show CHAPTER HI 89 At this point, the proposed project consisted of two powerplants, one near Page, Arizona (Navajo), and one near Farmington, New Mexico (Four Corners), with six 820 MW units and a total capacity of 4,920 MW. In February 1969, the El Paso Electric Company and the Public Service Company of New Mexico decided not to participate in the joint project. This decision necessitated modification of the initially contemplated development. Negotiations continued. Efforts were made to reach preference customers who might be interested and offer them a chance to participate. These included: Intermountain Consumer Power Association, Salt Lake City, Utah; City of Farmington, New Mexico; City of Anaheim, California; Arizona Power Authority, Phoenix, Arizona; Plains Electric B & T Cooperative, Albuquerque, New Mexico; and Rawlins, Ellis, Burrus and Kiewit, Phoenix, Arizona. In May 1969, the San Diego Gas & Electric Company and the Southern California Edison Company each decided that it did not desire to participate in the joint effort. This decision required a new look at the proposed joint development, since some 2,000 MW, or about 40 percent of the total generating capability, was destined for these two utilities. A smaller joint participation project of 2,310 MW was proposed in June 1969, consisting of one powerplant near Page, Arizona (Navajo), with three units having an expected effective output of 770 MW each and a transmission system consisting of a 500-kV line from the plant to the Colorado River near Boulder City, Nevada, and two 500-kV lines to the Phoenix area. The City of Anaheim, California, and the Arizona Power Authority indicated an initial interest in the project, but decided later not to participate. The participation by the United States in the Navajo Project provided the United States a share (24.3 percent) of the generation available from the Navajo Generating Station, and a share of the transmission facilities which were to be constructed as a part of the Navajo Project. Under the terms and conditions of the contracts for participation in the Navajo Project, the availability of the United States share of generation was contingent upon the operation of the Navajo Generating Station. Under this condition, power is available only when the generating units are operating. Therefore, each utility participant had to make its own arrangements for reserves and for an alternate source of power during periods of time when the Navajo Generating Station units are out of service for maintenance or other reasons. Similarly, the ability to receive this power at the project delivery points which are located in Phoenix, Arizona, and the Boulder City, Nevada, areas is contingent on the operation of the Navajo Project transmission system. This contingent operation presents a similar requirement for each utility participant to provide its own reserves. In the event of an outage of the transmission system, the power being supplied from the Navajo Project may or may not be available to the participants. In the event delivery cannot be completed, a utility participant must have its own alternate power source to replace the Navajo generation. The Navajo Project contracts also provide that when transmission capacity available to the participants is insufficient to accommodate all of the firm use of the transmission system, the use of available capacity will be allocated proportionately to each participant. This creates another situation which requires each utility to provide its own reserves. Public Law 90-537, which was effective September 30, 1968, provided that the Secretary was to submit his recommended plan to the Congress within 1 year from the effective date of the Act, that is, by September 30, 1969. With this deadline in mind, Reclamation, in order to present a complete and viable proposal, was faced with the necessity of assuring contractual arrangements for the sale of the United States entitlement to Navajo Project during the period beginning with the April 1974 anticipated inservice date of Unit No. 1 of the Navajo Generating Station and ending with the estimated time of requirement for pumping power for the Central Arizona Project, which then was January 1980. It was necessary, therefore, to complete assured arrangements by September 30, 1969, with customers who would agree to take and pay for the United States share during the interim period, subject to the reserve and transmission requirements applicable to all participants. The first draft of a Proposed Contract for the Sale of Interim Power for United States entitlement of Navajo Project was prepared by representatives of the Lower Colorado Region, Bureau of Reclamation, and by letter dated May 1, 1969, was distributed to the members of the Committee on Interim Use of United States Entitlement of Navajo-Four Corners Project. |
